September 2009

12 September 2009

As software as a service becomes mainstreamed, I’ve been watching how startups monetize their applications. The straight subscription model is the default. However, the recurring costs of a subscription model seem to annoy people as time goes on. If you aren’t using too many SaaS products, one or two subscriptions are tolerable. When you move up to 5 or 6 products you begin to get subscription fatigue.

In-game economies is one answer to subscription fatigue. Evony is a massively multiplayer real time strategy game that’s made a quiet entrance, but has amassed an impressive user base. It’s “always free” motto promises complete game play, but monetizes objects in the game. This gives the game player the freedom to buy into the game as much or as little as they wish. For Evony, the price can be free to whatever they’d like to spend.

Individual players in the game can join alliances which provide mutual support, protection and reinforcement in battle. As the communities solidify, Evony has made several game elements exchangeable, but several others are not. This creates an internal economy of need. If your team needs your participation and that requires an object you might be able to find, that puts creates a social need for that object.

Playing alone, the gamer might wait for a few days or even weeks until they find that object. The social need becomes a powerful element in the Evony business model. In light of this, it seems that Evony would benefit from creating functional groups of their buyable objects.

For example, when starting a new city in Evony, players need to quickly establish a lot of easily constructed structures and populate the city. Some of the things you can buy are “guidelines” that hasten construction and “boxes” or “packages” that can have people or resources. A “new city” package that included people, resources and guidelines would be what I’d expect to come next.

The communities grow quickly in Evony and can determine whether someone will make it in the game at all. They should be the first aspect of the game to leverage for Evony success. So, the next area I’d go for if I were Evony would be to provide community discounts. So if you are part of an alliance that spent a certain amount on Evony, the entire alliance gets either a kickback of game currency, a discount or a package of some type.

The next thing I’d do is monetize game participation. If you have a 100 member alliance but only 10 of them actually participate, that’s not worth much. But 100 members where 80 regularly participate is impressive and should be rewarded.

SaaS products outside the gaming world can learn from this as well. It’s not necessarily the software that is being monetized, it’s the performance of the user. Counter-intuitively the product becomes more valuable to the individual as their usage increases. This value increases exponentially as the network of users increases (Reed’s Law).

We’ve seen that networks don’t make an application sticky, but the activity of a network does. Evony has been interesting to watch as the activity of the alliances have brought people back to the game. This makes it “coopertainment” – entertainment that required cooperation in order to enjoy (and monetize) fully.

Enterprise social software isn't one application. It's a range of collaborative modes that includes blogs, wikis, micromessaging, personal dashboards, collaborative spreadsheeting, and social bookmarking.

When Michael discusses killing pilot projects (small rollouts as proofs of concept), he is spot-on in saying that the real value inherent to those types of projects is borne of network effects, not in the efficacy of the technology. So pilot projects = proving the tech and not realizing the business value. It would be like if I told you I wanted to know what University life was like, and you suggested I speak to a professor for a day to “try it out.”

Innovation is one of the easiest and least risky areas that can be tapped by most organizations.

Michael and Dion's quotations complement each other beautifully, and can be restated as:

Enterprise social software isn’t one application. It’s the realization that innovation has become the easiest and least risky way to solve problems within an organization.

Perhaps most important here is the word "enterprise." I submit that the term has fundamentally shifted from a consolidated model to a distributed one. The enterprise is no longer a central node with dependent groups hanging off of it. Rather, it has evolved into a network with greater nodal autonomy, faster communication, and improved decision making power.

This nodal structure was there all along. We see it in the human circulatory system, we see it in the layout of ant colonies, we see it in flora and fauna.

The hierarchic enterprise is the curtain. We have been fooled into believing that there is, or even should be, one central corporate OZ qualified to make all decisions. Over time, centralization has created costly information and decision making bottlenecks. Does this mean hierarchy is dead? Obviously not.

Enterprise 2.0 is not a panacea, it is a tool to allow corporate structures - congested by unnecessary bottlenecks - become leaner organizations. By redistributing information and decision making, companies limit waste, reduce costs, and are afforded the freedom to innovate. Microenterprises joined as nodes to a larger enterprise have the simultaneous ability to function both independently and as part of a cohesive whole.

What this means for Enterprise 2.0 is not that it becomes the next ERP, but that it becomes a host of spot-applications or, as Michael says, collaborative modes that allow us to realize Dion’s inexpensive and relatively painless innovations.

P.S. I really appreciate Michael’s “collaborative modes” – it re-orients the conversation from one of techno-miracles to one of business process. Not what are we going to use, but what are we going do?

07 September 2009

When I began to write a succession of posts on personal kanban back in July, I thought a few people might benefit from the idea. I never expected that the series would attract tens of thousands of viewers to my blog, Evolving Web.

Less than two months later, there is a growing and enthusiastic personal kanban community which has been posting photos, discussing innovations, and advancing the meme. In a few short weeks, the community grew large enough to support a dedicated web site.

So I am pleased to formally announce the launch of personalkanban.com, a blog and resource for personal kanban. Already, about a dozen guest posters and regular contributors have stepped forward to take the meme and run with it.

Those of you who have been reading Evolving Web for a while know I’m all about community, process, and collaboration. Seeing this community form, that it’s based on a lightweight personal process, and that collaboration is already taking place is therefore an awesome birthday present for me this year.

Please give the personalkanban.com a visit and subscribe to the feed. If you have personal kanaban stories to tell, please e-mail me at jim !at! soundbag !dot! com. The community would greatly benefit from your experiences and writing.